That’s a difficult one. I’m not a fan of lease extensions, as you still have to pay the full PIP benefit which means that on a car like an A1 your total outlay over the total term would almost certainly be far greater than had you bought the car privately (net of the residual value which, of course, you don’t have with a Motability sourced car). If you are not in a position to buy privately then that becomes less of a consideration.
The economics of lease extensions slightly improve if you have paid a high AP and added a number of expensive options, as the ‘per month cost’ becomes less. As I understand it, if you lose your PIP entitlement then you lose the car a few months later, so I don’t think that should be a consideration for you. If you like your current car and you lose your PIP entitlement then you may wish to buy it, but keep in mind that you will get better for less on the second hand market, as Motability ask very high prices which you cannot negotiate on and you don’t have the reassurance of a warranty that you get elsewhere. .
If you don’t want (or can’t afford) to source a car privately (new or used) and Motability is your only route to a car, then it simply boils down to what is available and the cost of it, compared to what you have now, plus second guessing what will happen in the future. On that last point, none of us know. There has been a tiny recovery in the choice of cars during 2023 but it’s still poor and the most noticeable additions have been EVs at eye watering APs, the size of which would negate the running cost savings for many Motability customers.
I’m conscious that I’ve not really answered your question, but hopefully have given you some food for thought when weighing up your various options!